[HN Gopher] Asana S-1
___________________________________________________________________
Asana S-1
Author : sean_lynch
Score : 163 points
Date : 2020-08-24 20:58 UTC (2 hours ago)
(HTM) web link (www.sec.gov)
(TXT) w3m dump (www.sec.gov)
| aresant wrote:
| An article by Tom Tungz that relates SAAS co marketing budgets to
| to annuity grabs helps me contextualize this S1.
|
| Asana's gross margin is ~85%!
|
| Their net retention is tracking @ 120% in 2020.
|
| So every $1.00 dollar of sales to a customer last year turned
| into $1.20 this year.
|
| AKA negative churn.
|
| Which explains the reason you see them spending $105m in sales &
| marketing to generate $142m in topline.
|
| Obviously this runs its course eventually, but at that point you
| cool down your S&M & R&D engine and try to keep up with counting
| all the cash flows.
|
| SAAS is just a remarkable business, absolute cash pigs.
|
| (1) https://tomtunguz.com/does-better-ndr-imply-greater-
| toleranc...
| m3kw9 wrote:
| FOMO on full blast
| ryanmccullagh wrote:
| In case anyone forgot, Asana was founded by Facebook co-founder
| Dustin Moskovitz.
| josh2600 wrote:
| And FB early employee Justin Rosenstein.
| gizmo wrote:
| According to the filing Asana has 1.2m paying users. Each user is
| worth maybe $1000. That puts Asana at 1.2bn.
|
| The median forward revenue multiple for public enterprise SaaS
| companies is 10x, and with 2020 revenues of 150mn that results in
| a 3bn market cap.
|
| A third data point is they raised 75M 16 months ago at a $900m
| post money valuation. With growth at 100% annually that puts
| their current valuation at 2.5bn or so.
|
| Three different 30 second valuation strategies that result in the
| same ballpark numbers.
| ummonk wrote:
| That 3rd point is outdated, as you have more recent valuation
| data - the stock recently traded at 13.04-25.00 price, with
| 151M shares outstanding and 33M in unexercised options.
| gen220 wrote:
| Can someone in-tune to this world explain why Moskovitz purchases
| equity through a trust, in the form of convertible promissory
| notes? It seems like he isn't taking any compensation in stock or
| cash, but prefers to "invest" in the company's stock, through
| this trust and promissory-note scheme?
|
| If you're confident that the company's eventually going to exit
| (obviously a big "if"), and you have the cash liquidity (which he
| obviously does, as one of the original co-founders of fb), is
| this essentially a method of getting compensation that isn't
| taxed as compensation? I'm trying to understand what the
| justification is for maintaining what looks like a fairly
| complicated transaction. It looks like they've done it a few
| times (2017, 2020 jan 2020 june). His entities also participated
| as investors in the Asana Series D and Series E rounds.
|
| Not meaning to cast aspersions, just curious because I haven't
| seen these kinds of setups in S-1's before. But most S-1
| companies don't have people with pre-ipo, >1bn net worth founder-
| CEOs, so it makes sense that this one might be a bit anomalous.
| jhylau wrote:
| I believe these types of trusts (without knowledge of the exact
| trust setup) are to limit the inheritance tax when he dies, by
| having the trust own the shares at an early stage (lower
| valuation, lower inheritance tax). It can appreciate within the
| trust without accumulating additional inheritance tax on the
| appreciation. The downside is the trust owns the shares and he
| can't liquidate it for his own use, which he doesn't need to
| cos he's already rich enough.
| simonebrunozzi wrote:
| That's a fair question. I am not a lawyer or accountant or
| anything in that field, but I can try to answer anyway.
|
| 1) Often trusts and LLCs are used for liability protection and
| anonymity; you see this used by investors owning multiple
| residential real estate properties.
|
| 2) Your comment on tax is interesting; of course, capital gain
| in the US is taxed at 20% (plus your state), while income tax
| gets to roughly twice that. So, potentially, that could be a
| way to reduce how much taxes you will pay.
|
| However, in relation to #2, I doubt that Moskovitz really cares
| to save 100k-200k a year in taxes. It's probably more about #1.
|
| Again, this is my $0.02. Please correct me or improve my
| comment if you know the subject more than I do.
| dmoy wrote:
| Trust tax brackets are steep enough that income tax and cap
| gains benefits are negligible. Anything that could be done in
| a trust w.r.t. cap gains could also be done as an individual,
| so there's no win there.
|
| Inheritance tax benefits might be substantial though.
|
| You're probably very right about the liability and anonymity
| aspects.
| ponker wrote:
| I'm not a fan of the product but at least this isn't a company
| built on labor exploitation or fucking up some existing
| ecosystem.
| silentsea90 wrote:
| Guessing you don't use said labor exploiting services?
| ponker wrote:
| I do but try to rectify the exploitation. Always double
| suggested tips etc.
| Aeolun wrote:
| The only labor I exploit is my own.
| maximente wrote:
| my guess is that a detailed account of the consumer goods
| you have purchased - including possibly the device upon
| which you typed out and submitted this comment to this web
| property - would indicate otherwise
| djohnston wrote:
| maybe, but probably not imo. the people who built my
| macbook are exploited, but i need it for work.
| jasondc wrote:
| 5 IPOs (S-1 filings) from Silicon Valley today:
|
| - Unity (San Francisco) - Jfrog (Sunnyvale) - Snowflake (San
| Mateo) - SumoLogic (Redwood City) - Asana (San Francisco)
| sdfhbdf wrote:
| Maybe even more just these 5 are on HN homepage...
| victor106 wrote:
| Is there a centralized place that we can track all the
| upcoming ipos?
| superfrank wrote:
| I believe this will have all acccepted S-1 filings
| https://www.sec.gov/cgi-bin/browse-
| edgar?company=&CIK=&type=...
| foxdev wrote:
| You can get a rough idea of it by looking at submissions from
| the sec.gov domain:
| https://news.ycombinator.com/from?site=sec.gov
| marviel wrote:
| Hey thanks, this is a neat tip.
| MattGaiser wrote:
| Record high market, so why not?
| actuator wrote:
| Yeah, seems like that. When Covid-19 hit, there were layoffs
| in AirBnB etc. and everyone was talking about how IPOs will
| get pushed for future. Seems like all those worries have
| evaporated considering Tesla is trading at $2000.
| supernova87a wrote:
| Wow, this is a torrent of IPOs today. Investors / boards are
| wanting to get money out before things turn south I feel.
|
| Aside from that, I'm surprised how much it costs Asana on
| engineering R&D, for essentially a ticket management system. How
| does a team grow to ~300+ developers ($89M R&D) to figure out how
| to attach PDFs and videos to tickets, and email people when
| there's a change in status? (ok yes I'm oversimplifying a bit,
| but not that much)
|
| And (as with all such companies) how much they need to pour into
| Marketing/Sales to sell this thing. These above costs basically
| wipe out the gross profits by 2x.
| ummonk wrote:
| No, you're oversimplifying a lot. Just security and
| infrastructure operating at Asana's scale requires several
| dozen engineers. Additionally, Asana has been developing all
| sorts of features around working with "tickets" - Gantt charts,
| automation, 3rd party APIs, mobile apps, etc. All of this while
| working with a large legacy codebase that makes development
| slow.
|
| (Note: I worked at Asana when it was ~100-150 engineers, and it
| felt like we could use double that. Having since moved to a FB
| team, I find I can develop UI features at probably 3-4x the
| speed in comparison to my time working on Asana UI, simply due
| to using modern React code with jsx and functional components
| using hooks)
| tempsy wrote:
| Very crowded market - not very sticky either relative to other
| SaaS type cos. I would avoid this one personally.
| dman wrote:
| Am going to short this one once it is out- saying this as
| someone who has been a user.
| vikramkr wrote:
| This is a hell of a market to short anything. In the near
| term anything that helps remote work like this is probably
| going to spike up. Good luck with that. I know that I
| wouldn't personally be comfortable being confident I could
| make collateral to outlast a bubble or guess correctly when
| the tide is going to turn to make money off of an option
| trade when it comes to a remote enabling company in a stock
| market as crazy/driven by politics and the fed as this one
| api wrote:
| Shorting anything now is shorting the federal reserve.
| danaur wrote:
| > Wow, this is a torrent of IPOs today. Investors / boards are
| wanting to get money out before things turn south I feel.
|
| People have been saying this for months now. Is there evidence
| that there are disproportionally more IPOs recently?
| ummonk wrote:
| Have they? This is the first time I've noticed a surge of
| IPOs this year.
| natrik wrote:
| Snowflake, SumoLogic, Asana, Unity all filed S-1's today.
|
| 4 relatively large, well known companies filing IPO's today.
| ummonk wrote:
| And AirBnB is much earlier in the process but has filed
| confidentially.
| eloff wrote:
| There's always a comment here on HN wondering why company X has
| so many engineers for such a seemingly simple product.
|
| The answer is, unsurprisingly, not that they're terribly
| inefficient. Rather it's that running a popular service at
| scale is hard, the long tail of features is really a long tail,
| and a lot of effort goes into even simple things because small
| differences really add up when multiplied by large N.
| aaronbrethorst wrote:
| Costs a lot of money to build your own programming language and
| then throw it out. https://blog.asana.com/2017/08/performance-
| asana-app-rewrite...
| phaedryx wrote:
| "Our founding engineers had learned from their experience
| working at Google and Facebook that to ensure a performant
| and stable application, they would need to build their own
| framework"
|
| Wow. Interesting.
| solutron wrote:
| What specific indicators besides covid / asymmetric v-shaped
| recovery (v-shaped recovery not distributed evenly across
| economy) are you pointing to? I understand VC's want to favor
| profitability earlier on in the funding cycle now than say in
| 2014 - 15, but that was kinda expected before the 'rona hit in
| March anyway.
| PragmaticPulp wrote:
| > How does a team grow to ~300+ developers ($89M R&D) to figure
| out how to attach PDFs and videos to tickets, and email people
| when there's a change in status?
|
| As with most of these companies, user-facing feature
| development is only a small part of the engineering workload.
|
| I would assume the majority of those engineers are working on
| less visible tasks: Devops, build systems, infrastructure
| monitoring, security, backups and data integrity, internal
| tooling for customer support, billing and accounts management,
| and other critical but otherwise invisible tasks.
|
| Duplicating the core 80% of Asana's features as a one-off
| product wouldn't be extraordinarily difficult. Scaling it into
| something that can operate as a business with hardened
| security, reliable data storage, consistent uptime, and
| reasonable internal tooling for customer service is where
| things get difficult.
|
| That said, companies often go overboard with hiring in the run-
| up to IPOs or acquisitions. Excessive R&D spends can be fixed
| on the road to profitability. Restoring a company's reputation
| after a major data loss disaster or a security breach is much
| more difficult, so it's safer to err on the side of throwing
| too many engineers at polishing everything. If they can't scale
| revenues to match, expect the engineering workforce to be cut
| down significantly.
| jahaja wrote:
| > How does a team grow to ~300+ developers ($89M R&D)
|
| Is it possible to reach a S-1 with a decent valuation with just
| ~30 employees "market confidence"-wise?
| sriram_sun wrote:
| Look at Service Now.
| thecupisblue wrote:
| IMO this will be one of the failed IPOs of the 2020.
|
| I understand (but not approve) 300 devs - they got a ton of
| integrations, enterprise client handling, lot of mobile,
| frontend and backend surface area to cover, lots of devops and
| support, teams to build new features, maintain tooling and so
| on... given time, any software team will slow down and scale
| up, unless it is specifically countered by the company. There's
| always stuff to be done (create, maintain, or both), pressure
| comes from the top and the usual response is "throw bodies at
| it". The less hackerish/the more corporate the company, the
| faster the engineering team blows up. Kinda inverse function of
| the red tape.
|
| But the reason I believe Asana is going down is that their
| product is just what it sounds like - boring. It's a problem
| that's been solved a million times and they are just lucky they
| got on the ride in the early days. But they never evolved and
| the marked is getting new competition every day that is
| fighting to take their users away the moment they google asana
| alternatives. On one hand, they got Jira/YouTrack to fight on
| the enterprise side and Trello/Monday/Clubhouse/Notion to fight
| at the startup & SMB sides. If they don't evolve their product
| and bring something unique that will differentiate them and
| save their customers more time or mental context, they will
| remain the "boring" choice in a time where people are looking
| for the "fun" thing. And while it's good to be the boring
| choice, it's also a good way to haemorrhage users and profits.
|
| If I was steering Asana, I'd look at stuff like Notion and
| JetBrains Space for inspiration and product evolution, focus on
| minimising users context burn rate, developer and general UX
| optimisation and visual noise reduction. If there is no large
| changes soon, grab some popcorn and watch it burn - I give it
| about a year before it starts tumbling downwards.
| xenospn wrote:
| I really don't understand how Asana excels at anything, let
| alone is a '10x'. They probably need to spend a fortune in
| marketing just to get people to sign up.
| jsonne wrote:
| It makes a lot more sense for marketers and others like us.
| I've tried getting away from Asana over and over but keep
| coming back. Everything else either isn't feature rich enough
| or is too difficult to use. They manage to strike the right
| balance. To me Asana is the epitome of the Churchill quote
| "Democracy is the worst form of government except all the
| others that have been tried"
| jimnotgym wrote:
| I know Asana is prettier than MS planner but:
|
| 1. Planner is bundled with 365
|
| 2. Planner works with Azure AD SSO for free.
|
| 3. Planner is 100% integrated with Teams.
|
| This makes Asana an outside bet for me.
| gregd wrote:
| Except Planner has no timeline or Gantt charts, despite
| claiming most of last year, that Gantt charts where on their
| roadmap. I've found Planner to be nothing more than a glorified
| Kanban board, which is also something Trello does much better
| even on their Free Tier using your 1 powerup of a Gantt chart.
| dmart wrote:
| I've found Asana to be a much, much nicer product to work with
| than Jira (at least as a developer, not sure about from the
| management side.) I genuinely wish them success and hope they're
| able to grow their marketshare.
| arkitaip wrote:
| What do you think about Trello?
| throw03172019 wrote:
| We use Trello for a public roadmap and Asana for internal.
| Trello is much simpler so that may turn off some
| project/product managers.
| dmart wrote:
| Not a fan of the board/card focused view, mainly. I think
| it's visually cluttered and hard to read at a glance. Asana's
| list view (esp. with inline subtasks) feels a lot more like a
| to-do list, and I prefer that UI.
| godot wrote:
| Do you have up-to-date experience on both? I ask because, this
| year is my first time using Jira in 10 years. I was in big corp
| 10 years ago and we were on Jira and it was a disaster to have
| to use. UI was a mess and it constantly went down or went slow
| (big corp; self-hosted.). My current startup started using Jira
| Cloud recently and I found it to be much better than my past
| experience, and better than Asana.
|
| I last used Asana at my last company, which I left 2 years ago.
| It was slow and a resource hog even on our pretty beefy work
| MacBook Pros. Compared to my current Jira Cloud experience in
| 2020, I much prefer Jira now.
| dmart wrote:
| This was about 2 years ago - at that time I found both Asana
| and Jira to be similarly slow, so kind of a wash in that
| regard. But it was corporate self-hosted Jira, so perhaps
| Jira Cloud is a smoother experience.
| [deleted]
| ryanSrich wrote:
| Linear.app has nailed the experience IMO. It's simple, fast,
| developer-first, and has the advanced features you'd want
| without the bloat. Asana IMO is just too slow performance wise
| and functions more as a product manager-first tool as opposed
| to a developer-first tool.
| peter_l_downs wrote:
| Am I reading this correctly in that they had a net loss in 2019
| of $50.1 (42.4 adjusted) million dollars, and then in 2020 a net
| loss of $118.6 (68.2 adjusted) million dollars? (bottom of page
| 58)
|
| And that their plan is to just continue trying to upsell and
| acquire new customers?
|
| Hmmmm
| ummonk wrote:
| Sales and marketing and R&D fuel rapid growth. This should be
| maintained until growth nears its ceiling and the company
| starts encountering diminishing returns on investment in
| growth.
| encoderer wrote:
| Yeah, what is going on at Asana?
|
| R&D costs outpacing revenue in the year before IPO really
| surprises me (from ~54% to ~62%).
|
| For comparison, Atlassian went from ~38% to ~36% in the year
| before IPO.
| actuator wrote:
| and to compare Atlassian was profitable for a decade when
| they went for IPO.
|
| Have always admired Atlassian on how it was run, at least
| till 2016 they had no sales team and grew the product with
| self serve.
| gregd wrote:
| The thing that drives me absolutely bonkers with Asana
| (others do this as well) is that the freelancer has to
| upgrade their "free" account to roughly $70/month to get
| functionality like seeing a Timeline (think Gantt). Their
| pricing isn't clear that to upgrade to Premium (to get
| Timeline) says it's $10.99/month. It's not until you get to
| the next screen that it tells you it's 5x10.99/month because
| there is a five person minimum.
|
| Almost none of these project management tools are built with
| full functionality for a freelancer who manages projects and
| people doing the tasks/projects, but doesn't need them to log
| into the project management tool.
| john_moscow wrote:
| Single-license freelancers are never the target audience.
| From my experience running a similar business, this is the
| hardest category of customers to deal with. Stuff like
| demanding very project-specific features for free overnight
| and cursing you when you explain how requests are
| prioritized from user numbers. Or demanding instructions on
| tangential topics (like how to troubleshoot some network
| issue their customer has) by claiming that it stops them
| from using the product.
|
| I mean, there are nice guys as well, but statistically it's
| just not worth it.
| gregd wrote:
| I'm not sure I'm really buying your statistics. There are
| ways to go about prioritizing roadmap items that aren't
| rooted in customer size (think UserVoice). The company
| can also have a well documented and published roadmap so
| that I can easily see what's coming down the pipe and
| whether or not it's going to factor into my buying
| decision (I get item x which is something I really want -
| in a couple of months).
| PragmaticPulp wrote:
| Sadly, I can confirm this is true.
|
| Most single-seat customers are fine, of course, but a
| very vocal minority can cause a lot of problems.
|
| I believe it's due to the mindset shift. If a team or
| company decides to use a specific software, people are
| more likely to accept the decision and learn to work
| within the tool's features and limitations. The cost of
| switching tools is high, so they tend to stick around for
| a long time.
|
| Single-user freelancers can change tools at any time,
| because they don't have to negotiate with anyone else. As
| such, they feel they have more leverage in threatening to
| cancel their subscription if the company doesn't cave to
| their demands.
|
| Most of them don't realize that the company isn't making
| much, or any, money off of their single-seat license when
| they're consuming hours of customer support or social
| media engagement time every month. It's better to see the
| squeaky wheels just leave the platform.
|
| For another data point: At scale, you get a lot of
| threats from people claiming they're going to Tweet about
| how bad your product is to their thousands of followers,
| or write a newsletter about how much they hate your
| product, unless you implement the specific feature
| they're demanding. These threats exclusively come from
| the single-seat users, because no company is dumb enough
| to try to extort another company with threats of
| tarnishing their reputation in public.
|
| It's unfortunate, but it's true. It's vastly easier to
| just deal with enterprise customers or larger teams who
| have better things to do than tie up customer support
| time for every little complaint or suggestion (or demand)
| goldengatebound wrote:
| Ummm, I'm on a two seat plan currently, maybe it was a
| recent change to allow plans under 5?
| actuator wrote:
| I am assuming that's on purpose. For them the number of
| people on project is proportional to the money they can
| earn. Why would they cannibalize their revenue by allowing
| shadow profiles.
|
| Edit: re-read your comment. It seems like you clarified or
| I missed about the five person being the minimum thing for
| that.
| gregd wrote:
| Shadow profiles? Huh?
|
| I simply put tasks in Asana and want to view it on a
| timeline like a Gantt chart. I can't do that unless I pay
| 5x10.99/month. There is a huge gap between $0 and
| $70/month.
|
| What revenue are they cannibalizing if I'm not going to
| go from $0/month to $70/month when I'm only one person?
| They just lose me as a customer going forward.
| [deleted]
| actuator wrote:
| While better than Jira in UI, I haven't been able to like Asana
| as a product for some reason. In my previous company we moved
| away from Asana to Jira because it seemed PMs and higher
| management found Jira easier to work with.
| minimaxir wrote:
| ...is there a reason a ton of tech startups are dropping their
| IPOs today?
| mlacks wrote:
| "tech startups" are IPOing almost daily. Happened to be a
| couple of big names today.
|
| https://sec.report/Form/S-1
| tempsy wrote:
| OP means in general, and to be fair the tech IPO market post
| financial crisis has actually been fairly weak. the number of
| tech IPOs happening right now is at multi year highs
| whatok wrote:
| Summer is traditionally quieter since people are on vacation;
| still kinda holds true now. With S-1s out this week, you have
| more than enough time for the grunt work to be done before
| people are back in the office after Labor Day. I'm sure bankers
| have advised clients to get their ducks in a row because
| there's going to be a lot of supply and you really don't want
| to be the last out the door.
| tempsy wrote:
| because the tech market is as frothy if not more so that 1999?
| shajznnckfke wrote:
| The market is the highest it's ever been. A lot of unicorns
| have waited for years to IPO and it there's never been a better
| time to do it.
| mbesto wrote:
| Today specifically? Not sure.
|
| In today's climate? Yes. To give you an idea:
|
| The overall market is being carried by 5 companies...all "tech"
| companies:
|
| https://www.putnam.com/advisor/content/perspectives/7816
|
| And most of the high growth SaaS companies are up YoY...by a
| lot:
|
| https://imgur.com/a/xjI3JBD
|
| Wall st is foaming at the mouth to buy up more of these
| companies.
| caeril wrote:
| With the sole exception of Aug 1999 - Feb 2000, public
| technology companies have never before commanded such high
| earnings multiples as we have now.
|
| It would be a dereliction of fiduciary duty for executives and
| boards _NOT_ to fleece the public for cash right now.
| nostrademons wrote:
| I mean, the driver for these record high multiples is that
| the Fed has made it very clear that cash will be extremely
| abundant over the next couple years, and hence worth a lot
| less. It would be a dereliction of duty for those public
| investors to _not_ get rid of it ASAP and put it into scarce
| resources, like the stock of hot Silicon Valley companies.
|
| The folks who are the real losers are any suckers who think
| they're going to get by with a fixed wage, particularly if
| they're in a competitive labor market.
| CleanItUpJanny wrote:
| last chance to exit scam before the bubble pops
| toomuchtodo wrote:
| I _totally get_ the feeling behind this, but you can 't blame
| market participants for taking actions that are rational,
| regardless if the overall market fundamentals are/seem to be
| irrational.
|
| If the market is desperate for returns, and tech equities are
| one of the few remaining avenues for such returns, and you
| are the owner of those equities, what else would you expect
| to occur? "No no no, don't buy these valuable shares of my
| company, invest elsewhere!" No way, you're going to cash out
| as fast as possible before your gains evaporate when the
| market transitions.
| tehjoker wrote:
| Most undesirable actions by the powerful have a rational
| character. It's bizzare to me that this is so commonly used
| as a defense. It says to me that the problems are seen to
| be individuals, not systems of power.
|
| Note: I'm not commenting on the specific case here, just
| this argument in general.
| mrkramer wrote:
| Investors will decide. Supply and demand.
| dang wrote:
| Maybe so, but please don't post unsubstantive comments to
| Hacker News.
| rvz wrote:
| It is indeed a race to the finish before the whole thing
| crashes down soon.
|
| Maybe as soon as they heard Airbnb and Palantir planned for
| their IPOs, everyone started to run for the hills for their
| own IPO filings before the whole thing falls over soon.
|
| Reminds me of the dotcom era. Now this is the time again.
| paloaltokid wrote:
| Based on a few of the comments on this thread, I wanted to point
| out that filing an S-1 is not something that you just do
| overnight. When companies decide to go public it's a lot of work
| usually involving multiple dedicated teams on the business side.
| It takes many months and can take over a year.
|
| So while the timing here is interesting, nobody decided on Friday
| that many well-known tech firms would declare their intent to go
| public on Monday.
| grey-area wrote:
| No, they decided that 6 months ago (or whatever the lead time
| is), but everyone decided at the same time, for fairly obvious
| reasons.
| baron816 wrote:
| Anyone else interested in filing to go public today?
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